Interview with David Speers

Sky News

Tuesday, 10 May 2005
9.30 pm

SUBJECTS: Budget

SPEERS:

Peter Costello, thanks for your time tonight.

TREASURER:

It is great to be with you.

SPEERS:

I firstly want to ask you, when was the decision made on these tax cuts?

TREASURER:

As we were doing the Budget.

SPEERS:

Late in the piece though?

TREASURER:

No, my view has been for quite some time that if you can balance your Budget,

re-pay debt, fund your services then we should be trying to get taxes as low

as consistent with that. I saw the opportunity to cut taxes and we took the

decision accordingly.

SPEERS:

Your decision or a joint decision?

TREASURER:

Oh look, the Treasurer is responsible for the Budget and for the big Budget

measures, but at the end of the day you have got to get the Government as a

whole to sign off on it.

SPEERS:

Those who have been pushing for tax reform really wanted to see the top rates

brought down, now you have been generous in increasing the thresholds of those

top rates but you haven’t really, or have you really tackled the issue

of tax reform?

TREASURER:

Oh absolutely. Look, the changes that I announced tonight mean that only 3

per cent of Australians will be on that top rate, 3 per cent. For 97 per cent

of Australians, that top rate won’t affect them. Now, you could argue,

well why don’t you cut the top rate and that would produce huge tax cuts

for millionaires, multi-millionaires, I thought the most important thing was

to increase the threshold because that just makes the top rate quite irrelevant

for most Australians.

SPEERS:

Let’s look at the welfare changes. Those on the Disability Support Pension

currently are quarantined…

TREASURER:

That is right.

SPEERS:

…does this grant a two-tiered system though where two people with the

same back injury for example, one who is currently on the support pension is

fine but someone who is yet to join that pension won’t be able to get

it?

TREASURER:

Well somebody who hasn’t been injured because you are only talking about

people that might be injured in the future. My view is that you know, we wanted

to be able to reassure everybody who is on a disability pension you won’t

lose anything. No disability pensioner will lose anything. What we are talking

about is the rules for the future and by quarantining people who are already

on payments we can make that undertaking, you won’t lose it and we can

do the same for single parents.

SPEERS:

But do you take my point though, that if you do have people with the same injury…

TREASURER:

I can understand your point, so your point would say you ought to have either

got harsher with people that are currently on it or not done welfare reform

at all. I think the important thing is to start working at reducing the increase

rather than go back in relation to claims that have already been lodged.

SPEERS:

You also said in your news conference that this Budget includes a build up

of infrastructure, what infrastructure?

TREASURER:

Roads, rail, the Auslink programme, a $12 billion programme, rail on the eastern

seaboard, improving links down to Port Waratah, Hume Highway, Pacific Highway,

there are some very significant infrastructure.

SPEERS:

A lot of that announced in the Auslink programme, but what is new in this Budget

on infrastructure?

TREASURER:

Well a lot of it has been part of the Auslink programme but we have actually

increased the amounts under the Auslink since last years Budget and it is around

$12 billion, these are large sums, $12 billion is a large sum of money, it is

more than you and I take home in our pay packet.

SPEERS:

Well I should hope so. You did say that your aim for this Future Fund is to

put surpluses into it and also the proceeds of the full sale of Telstra. Is

that your position or is that the Government’s position?

TREASURER:

Well the Government’s position has always been that if you sell an asset

you have got to either build an asset or retire debt. If you sell an asset and

spend it, the asset is gone and the money is gone. It is like selling the family

silver. Now, previously in relation to Telstra what we did is we paid down our

mortgage. Now that the mortgage is low what I want to do is build a financial

asset.

SPEERS:

But has Cabinet ticked that off, that every cent from the sale of Telstra will

go into the Future Fund?

TREASURER:

No, well we haven’t yet even got legislation to sell Telstra, so we haven’t

yet gone into what is going to happen to a sale which is banned by law. But

the object is to provide a saving for the future and the Future Fund is the

obvious place for proceeds to (inaudible)?

SPEERS:

Are you going to have a battle though with your National Party colleagues on

what to do with the Telstra money?

TREASURER:

Well you know, I think we have got to get the legislation to sell, through

first. Don’t count your chickens until they have hatched.

SPEERS:

This is your tenth Budget, do you feel you get better at them?

TREASURER:

Well that is for others to say.

SPEERS:

But obviously it is a gruelling process.

TREASURER:

It is a lot of hard work, yes, it is a lot of hard work, it is a $200 billion

budget and you would expect the person responsible for it to work hard and I

do.

SPEERS:

And are you happier with this year’s budget than some of your previous

budgets?

TREASURER:

Look, if you have the opportunity to balance a budget, set up a Future Fund

and cut taxes, it is a great outcome to produce.

SPEERS:

Would you enjoy going through the process one more time?

TREASURER:

Well let’s get through this process, we are focusing on what we have

done, what we have done tonight, how can we enact it. People have got to realise

that the Budget is actually just an announcement, from now on it has got to

be enacted and right up until the 30^th of June we will fighting for

this Budget in the Parliament. You have got to bare this in mind that this Budget

will still go into a hostile Senate.

SPEERS:

But on the leadership which obviously a lot of people will be seeing this Budget

through the prism of. You have spoken a lot about the need for a smooth transition,

but you haven’t explained why there needs to be a transition anytime soon.

TREASURER:

Well I don’t think tonight is the night to go into those sorts of things,

I think tonight is the night to concentrate on the important things that we

can do for the Australian public and that is what I am focusing on.

SPEERS:

And you are not going to give anything more away about…

TREASURER:

No.

SPEERS:

Treasurer thanks for your time.

TREASURER:

Great to be here.